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07-08-2014

Marketing Warfare

In such an environment, each of the four firms has different objectives:

Number 1 firm: market domination

Number 2 firm: increased market share

Number 3 firm: profitable survival

Number 4 firm: survival

Principles of Defensive Warfare.

A defensive strategy is appropriate for the market leader. Ries and Trout outline three basic principles of defensive marketing warfare:

№1.Defensive strategies only should be pursued by the market leader. It is self-defeating for a firm to pretend that it is the market leader for the purpose strategy selection. The market leader is the firm who has attained that position in the mind of the consumer

№2.Attacking yourself is the best defensive strategy. Introducing products better than your existing ones preempts similar moves by the competition. Even if the new product has less profit margin and may reduce short-term profit, it accomplishes the more important long-term goal of protecting the firm’s market share.

№3.The leader always should block strong offensive moves made by competitors. If the leader fails to do so, the competitor may become entrenched and permanently maintain market share.

Principles of Offensive Warfare

An offensive strategy is appropriate for a firm that is number 2 or possibly number 3 in the market. However, in some cases, no firms may be strong enough to challenge the leader with an offensive strategy. In such industries, the market leader should play a defensive strategy and the much smaller firms should play a flanking or guerrilla one.

Ries and Trout present the following three principles of offensive strategy:

№1.The challenger’s primary concern should be the strength of the leader’s position, not the challenger’s own strengths and weaknesses.

№2. The challenger should seek a weakness in the leader’s strength — not simply a weakness in the leader’s position.

№3. Attack on as narrow a front as possible. Avoid a broad attack.

Principles of Flanking Warfare.

A flanking attack is not a direct attack on the leader, but rather, an attack in an area where the leader has not established a strong position. Ries and Trout present the following three flanking principles:

№1. A flanking move is best made in an uncontested area. The product should be in a new category that does not compete directly with the leader and should be the first to target the segment.

№2. A flanking move should have an element of surprise. Surprise is important to prevent the leader from using its enormous resources to counter the move before it gains momentum. Test marketing should be minimized to maintain the element of surprise. In the earlier example of Datril vs. Tylenol, Johnson & Johnson first learned of the impending launch of Datril from Bristol-Meyers’ localized test marketing of Datril.

№3.Follow-through (pursuit) is equally as important as the attack itself. The firm should follow-through and focus on solidifying its position once it is established before competitors launch competing products. Too often, management turns its attention to the products that are not performing well rather than strengthening the position of the winners. If the firm does not have the resources to strengthen its newly won position, then perhaps it should have used a guerrilla strategy instead of a flanking one.

Principles of Guerrilla Warfare

Guerrilla marketing differs from a flanking campaign in that the guerrilla move is relatively small and differs significantly from the leader’s position. Guerrilla marketing is appropriate for companies that, relative to the competition, are too small to launch offensive or flanking moves. Ries and Trout list the following three principles of guerrilla marketing warfare:

№1. Identify a segment that is small enough to defend. For example, the scope can be limited geographically, demographically, by industry, or by price.

№2. Never act like the leader, even if successful in the guerrilla attack. Some companies that make a guerrilla move are successful in it and begin to act like the leader, building a larger, bureaucratic organization that slows it down and increases overhead costs. A guerrilla should resist the temptation to give up its lean and nimble organization.

№3. Be ready to enter or exit on short notice. If the market for the product takes a negative turn, the guerrilla should exit quickly rather than waste resources. Because the guerrilla has a nimble organization, it is better able to make a quick exit without suffering huge losses. Similarly, the guerrilla can respond more quickly to a market opportunity without spending months or years having committees analyze it. Guerrilla opportunities sometimes arise when a large company discontinues a product, leaving a gap on which the guerrilla firm can capitalize if it acts quickly.